PLM Future Business and Social Models

Usually, when we are discussing various aspects of software, we are spending lot of time talking about technologies. However, I think, most of the people, learned these days, that to have an excellent product and technology is only part of the game. Business Model matters not less than technology. You may have an excellent technology. However, you have no idea how to sell it to your customers. Nowadays, to think “business” is not enough too. My take is that we also need to put “Social” next to business. I think, “social” becomes a very important part of the business.

Before I will dig inside of possible business and social models, I want to ask – what is so special about PLM? Is the same as any enterprise software? My guess is that there is some differentiation that can be applied to PLM. It comes due to a huge dissonance I can see between adoption of PLM as a manufacturing strategy and PLM software adoption level. I can see a great level of PLM ideas adoption. If you talk to engineering and manufacturing people, they will explain how important Product Lifecycle Management strategies for their business. However, if you’ll shift talks to the topic related to software packages, the actual discussion will be going a very wrong way.

There is a lot of magic in the word ‘open’. Very often, we are manipulating by “open”. Open API, Openness, Open Access to Data, Open…  In my view, the strongest trend in the space of “Open” is, actually, Open Source. Many companies outside of PLM space are experimenting with the open source and lately I had chance to see lots of interesting results coming out of this space. Aras Innovator is the only product in PLM space today thinking about Open Source. Without going too much in the details, some of these experiments are very fascinating.

Another interesting direction is Free or Freemium. We had chance to see lots of examples related to free models in consumer space. However, businesses are also starting to explore this space. I had chance to post about different aspects of Free models. You can take a look on one of my previous posts. Freemium model is coming from the combination of free and premium. In my view, it can be combined with Open model as well. Free can provide an easy path to customers. However, I had chance to hear lots of criticism of free in the business space, especially from people selling value to enterprises.

I learned an interesting and new trend in business models from Daniel Freeman on his marketing phreaks blog. Causium is a new business model based on the idea of charity and donation. The fundamentals of this model are in the psychological incentives and psychic needs of all parties. You can take a look on the experiment Atlassian is making by charging 10$ and proceed these revenues to charity. I don’t see many other examples of this model, but it provides a very unusual way to get into business with customers.

What is my conclusion today? PLM need to think how to innovate in a non-technological space too. I’m not saying that PLM vendors successfully solved all technological problems. Nevertheless, it seems to me that even with today’s level of PLM product and technological development, their adoption stacks because of some business and social aspects. Do you think existing PLM vendors will be able to make this shift? Time will show. In my view, all depends on how healthy is their core business today. Just my thoughts…

Best, Oleg



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